Thursday, 23 October 2008
The Australian may be making the right point that somewhere along the line, the RBA Governor probably did state the obvious, i.e. that banking guarantees distort the financial markets. But Turnbull’s disastrous appearance on The 7.30 Report last night is a reminder that politically it’s a stupid point to pursue.
For future reference, the coalition might do well not to take its political lead from The Australian. The paper has its own agenda, and its own problems. In positioning itself in the quality market as the ideologue of the right, it has meant its editorial, and those of many of its journalists, spent the last decade engaged in a phoney cultural war that may have absorbed some of the right and the left, but was ultimately a sham. Part of it was believing there was a real neo-liberal economic agenda abroad and an anti-union Thatcherite one at home. This was supported by views so strongly held that when market forces really did hit, The Australian editorial and even its most free marketeer journalist went running for the government’s apron strings. The paper’s ‘revelation’ about who said what to whom over the banking guarantees (which it supported) is just an attempt to salvage some free-market credentials.
The Australian is just a newspaper that will be wrapping tomorrow’s fish and chips. The coalition doesn’t have that luxury. It too is saddled with a delusion about Australia’s economic policy over the last decade that it may have believed was a coherent ideological program but was in reality little different to that in Labour-governed UK. But unfortunately for the coalition, it can’t just drop it. In fact this fallacy was only recently repeated again in this ‘critique’ of Howard by George Brandis:
Howard’s most conspicuous achievements were in the economic field, where his liberalising instincts prevailed. His greatest insight was to grasp that Deakinite policies were obsolete; his most important legacy was the fundamental structural reform over which his government presided, and which gave Australia an economy fit for the 21st century.
Brandis thinks he is talking about the introduction of free market efficiency, but he really means a sales tax, doesn’t he?
Turnbull politically had little choice than to support Rudd’s move and should have stayed close, if at least with a bit of sceptical distance in case things go wrong. Unfortunately, to please those of the old leadership who didn’t want him in the first place, he has taken a good tactic too far, much as Nelson did before him and for much the same reason. What we saw yesterday with the grilling of the Secretary of the Treasury was the coalition finding anyone to hide behind, whether Henry or RBA Governor Stevens, to retreat and salvage some ideological credibility. But just as for The Australian, everyone knows what we saw a fortnight ago posing as a national-spirited act of bipartisanship – a loss of free market nerve.
Posted by The Piping Shrike on Thursday, 23 October 2008.Filed under Tactics